Factors That Influence Your Car Insurance Risk Profile

Insurance is based on risk, more exactly the “risk” you pose for making a claim and costing the insurer more money than they make. If a company thinks that you are prone to make claims, you will be labeled high-risk and in many cases, dropped. Find out some of the factors used by the companies to assess your profile. Also, get free car insurance quotes and compare prices.

Car insurance history. If you’ve had a long history of insurance coverage, and if you’ve chosen policies with better coverage, you’ll pay less for your auto insurance. For example, you use to purchase high liability coverage. You will be seen more responsible than a person who has bought policies with minimum limits. State of California is the only exception to this rule.

The purpose of the car. When you apply for your car insurance policy, the agent will ask how you use your vehicle. The answer will influence the cost of insurance, with prices varying around 20%, depending on purpose.

Your honesty. Yes, this is a big factor and it is strongly related to the previous purpose. If you lie about car’s specifications, driving history or car’s purpose, you risk having your policy cancelled if caught.

Your marital status. Married people pay less for their auto insurance policies than single persons. When a single person gets married, his or her rate will drop $74 a year, on average. After a divorce, the rate goes right back to where it was. If you’re married and your spouse passes away, your rates will climb a little higher, though not as high as if you’d gotten divorced.

Education level. According to some studies, nationally, people with a bachelor’s degree save $32 more each year than people without a high school diploma.